By: The Working Forest Staff
PENSION & INVESTMENTS — Domtar has agreed to purchase group annuity buyout contracts from Sun Life Financial to transfer $360 million in liabilities for two defined benefit pension plans in Ontario. The company will also convert an additional $101 million of existing buy-in annuities with existing insurers into buyout annuities for its pension plans, it said Thursday.
In total, Domtar had $1.6 billion in U.S. and non-U.S. defined benefit pension plan assets as of Dec. 31, according to its annual report.
“As of Dec. 31, 2018, the company’s defined benefit plans had a surplus of $107 million on certain plans and a deficit of $88 million on others,” the annual report said.
The buyout deals represent 20% of the assets in Domtar’s four Canadian defined benefit plans, a company spokesman said Thursday.
The annuity buyout transactions will enable Domtar to reduce risk associated with volatility in the company’s pension plan obligations and assets, a company news release said.
Under the annuity buyout transactions, responsibility for pension benefits owed to 1,265 Domtar retirees and spouses who are receiving survivor pensions will be transferred, the company spokesman confirmed.
Timing and amounts of current monthly benefit payments will not be affected, and insurance companies will begin making payments to affected retirees and spouses March 1, the news release said.
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